Talent Management in the current climate Brewing up ... - Ashridge

In late September 2008, the
unthinkable became a reality
with the announcement of the
collapse of Lehman Brothers. This
was probably the tipping point
of the ‘Credit Crunch’ into a fullblown
‘Economic Crisis’. Few
people anticipated the scale and
reach of what happened next.
‘Uninterrupted’ economic growth
abruptly changed to a global
economic slow-down and decline.
What was different this time was
that there appeared to be no ‘safe
havens’, where investment could
be redirected into other sectors or
other parts of the world. Mature
and developing markets, whether
from the East or the West, are now
all in this together.
The media has presented us
with a series of headline-grabbing
stories around the losses of the
banks, the collapse of High Street
names, financial crisis in the
automotive industry and rising
unemployment figures. These
headlines and the uncertainty
they confront us with have stirred
up anxiety and fear across the
world. There is a noticeable lack
of confidence in the financial
system, stirrings of civil unrest,
anger at what is perceived as ‘bailouts’
for bankers who caused the
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‘IN THE THICK OF IT’
How are leaders and their
organisations experiencing
the economic crisis?
By Kevin Power and Andrew Day
Since early December 2008, Kevin Power and Andrew Day have been
researching into how leaders and their organisations have been affected
by the economic crisis and how they are responding. They are at a midpoint
in the research and this article presents a brief ‘snapshot’ of some
of the early insights that are starting to emerge.
crisis whilst ordinary citizens bear
the brunt, and a strong desire to
allocate blame. We are all affected –
if not economically then emotionally
– by the anxiety that has been
released within society and our
organisations. It is understandable
then that many people are now
questioning their own values and
sense of purpose. Some feel that
perhaps the world of business will
never be the same again.
What is really going on
in organisations?
In an attempt to get behind the
headlines and statistics, we have
been talking directly to leaders who
are currently ‘in the thick of it’ as
they navigate their organisations
through the current market
uncertainties. At the time of going
to press we have received over 75
responses to our on-line survey
and completed interviews with
over 40 leaders and senior people
in leading organisations drawn
from automotive, manufacturing,
professional services, banking/
finance, leisure, energy, business
support, telecommunications, and
commercial property sectors. While
the focus is on firms headquartered
in the UK and Europe, contributions
from subsidiaries based in the
Middle and Far East have
been included to gain a global
perspective. In these conversations,
we have been asking:
• How are organisations and
leaders experiencing the
economic conditions?
• What have been the specific
challenges confronting their
business?
• How are they responding?
And how are other people
reacting in their organisation?
• What is it they are doing as
leaders that is having the most
impact and what are they
learning along the way?
• What is giving them the most
strength or hope in the current
climate?
To supplement these
interviews, we have distributed an
online survey to our clients and
wider contacts and to date, we
have had detailed responses from
another 50 senior managers.
We shall be publishing our
findings later in the year, but are
already able to share an outline
of what we are discovering and
some initial insights that we shall
be seeking to validate as our work
proceeds.
What are we discovering?
Our research is discovering that
whilst the media has significantly
influenced the way we are
responding, it inevitably only deals
with what is newsworthy – the
drama and despair – which is
just one aspect of the full picture.
We are certainly hearing stories
of organisations that are in a very
difficult position and one or two
that could be described as being
in crisis. We are also hearing,
however, stories of creative change,
innovation and remarkable levels of
commitment and resilience. In the
midst of these challenges, many
of our participants have been
expressing a sense of energy and
excitement about their current
experience. Unusually, they are
being forced to deal with the here
and now, given that the future is
likely to remain unclear for quite
some time.
It is evident that each
organisation’s experience is
unique. The full impact of the
economic conditions is influenced
by: the context of its industry
sector or market, the financial and
ownership structure, its competitive
position in the market, product
or brand strength and historic
performance. Internal factors, such
as culture, attitude to risk, sense
of empowerment and leadership
capability, also shape how people
are experiencing the economic
crisis. We are therefore cautious of
making sweeping generalisations
or simplistic statements about
the implications of the economic
environment.
The economic realities
In broad terms, organisations’
reactions to the economic impact
on their business vary on a kind
of continuum. At one end of the
continuum, the business is ‘staring
into the precipice’, with a loss of
confidence shown by a collapse
in share price, or a withdrawal of
further funding. As one person
put it: “We are battening down the
hatches and weathering the storm
as best we can. We are reducing our